Description of Business Segments

12 Months Ended

Dec. 31, 2019

We are organized into operating segments based on product groupings. These operating segments have been aggregated into three reportable global business segments: Personal Care, Consumer Tissue and KCP. The reportable segments were determined in accordance with how our chief operating decision maker and our executive managers develop and execute global strategies to drive growth and profitability. These strategies include global plans for branding and product positioning, technology, research and development programs, cost reductions including supply chain management, and capacity and capital investments for each of these businesses. Segment management is evaluated on several factors, including operating profit. Segment operating profit excludes Other (income) and expense, net and income and expense not associated with ongoing operations of the business segments, including the costs of corporate decisions related to the 2018 Global Restructuring Program described in Note 2.

The principal sources of revenue in each global business segment are described below:

•

Personal Care brands offer our consumers a trusted partner in caring for themselves and their families by delivering confidence, protection and discretion through a wide variety of innovative solutions and products such as disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, and other related products. Products in this segment are sold under the Huggies, Pull-Ups, Little Swimmers, GoodNites, DryNites, Kotex, U by Kotex, Intimus, Depend, Plenitud, Poise and other brand names.


•	Consumer Tissue offers a wide variety of innovative solutions and trusted brands that responsibly improve everyday living for families around the world. Products in this segment include facial and bathroom tissue, paper towels, napkins and related products, and are sold under the Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Neve and other brand names.

•

K-C Professional partners with businesses to create Exceptional Workplaces, helping to make them healthier, safer and more productive through a range of solutions and supporting products such as wipers, tissue, towels, apparel, soaps and sanitizers. Our brands, including Kleenex, Scott, WypAll, Kimtech and KleenGuard are well known for quality and trusted to help people around the world work better.

Net sales to Walmart Inc. as a percent of our consolidated net sales were approximately 14 percent in 2019, 2018 and 2017.

Information concerning consolidated operations by business segment is presented in the following tables:

Consolidated Operations by Business Segment



	Year Ended December 31
	2019			2018			2017
NET SALES^(a)
Personal Care	$	9,108		$	9,037		$	9,078
Consumer Tissue	5,993			6,015			5,932
K-C Professional	3,292			3,382			3,297
Corporate & Other	57			52			41
TOTAL NET SALES	$	18,450		$	18,486		$	18,348

OPERATING PROFIT^(b)
Personal Care	$	1,904		$	1,833		$	1,933
Consumer Tissue	1,007			875			1,052
K-C Professional	657			634			645
Corporate & Other^(c)	(787		)	(1,112		)	(245		)
Other (income) and expense, net^(d)	(210		)	1			27
TOTAL OPERATING PROFIT	$	2,991		$	2,229		$	3,358


(a)	Net sales in the U.S. to third parties totaled $9,027, $8,803 and $8,741 in 2019, 2018 and 2017, respectively. No other individual country's net sales exceeds 10 percent of total net sales.


(b)	Segment operating profit excludes other (income) and expense, net and income and expenses not associated with the business segments.


(c)	Corporate & Other includes charges of $515 and $921 related to the 2018 Global Restructuring Program in 2019 and 2018, respectively. Restructuring charges for the 2018 Global Restructuring Program related to the personal care, consumer tissue and K-C Professional business segments were $252, $176 and $75 for 2019 and $528, $229 and $125 for 2018, respectively.


(d)	Other (income) and expense, net for 2019 includes income of $31 from a gain on the sale of property associated with a former manufacturing facility that was closed in 2012 as part of a past restructuring, and for 2019 and 2018 includes income of $194 and $12 related to the 2018 Global Restructuring Program. 2017 includes a charge of $24 for the early redemption of debt.



	Personal Care		Consumer Tissue		K-C Professional		Corporate & Other		Total
Depreciation and Amortization
2019	$	430	$	372	$	111	$	4	$	917
2018	426		331		121		4		882
2017	324		283		112		5		724
Capital Spending
2019	518		489		195		7		1,209
2018	415		299		157		6		877
2017	405		281		92		7		785
Goodwill^(a)
2019	557		522		388		—		1,467
2018	564		522		388		—		1,474
2017	617		559		400		—		1,576
Assets
2019	6,630		4,954		2,442		1,257		15,283
2018	6,208		4,738		2,285		1,287		14,518
2017	6,592		5,007		2,255		1,297		15,151


(a)	In 2017, we acquired the remaining 50 percent of our joint venture in India, which resulted in the recognition of $35 of personal care goodwill. All other changes in goodwill are related to currency.

Sales of Principal Products



(Billions of dollars)	2019		2018		2017
Baby and child care products	$	6.3	$	6.3	$	6.3
Consumer tissue products	6.0		6.0		5.9
Away-from-home professional products	3.3		3.4		3.3
All other	2.9		2.8		2.8
Consolidated	$	18.5	$	18.5	$	18.3